By: Abby Salameh, Chief Marketing Officer
Published February 7, 2018
The Destination for Independent Broker-Dealers to Connect, Engage and Advocate for their Advisors
Last week I had the distinct honor and pleasure of attending and participating on a panel at the Financial Services Institute (FSI) OneVoice Conference held at the Gaylord Texan resort. Well attended by over 600 independent broker-dealer executives and a few of us Hybrid RIA firms, it was two days extremely well spent engaging in productive conversations.
What a Difference a Year Makes
The sessions this year focused on critical issues and relevant opportunities we all face in the financial industry. With six distinct tracks to choose from including CEO, Compliance, Due Diligence, Operations & Technology, Supervision, and Marketing, Growth & Business Development, it was difficult to decide where to go. I found it interesting that none of the headlines of any of the sessions included the dreaded words “DOL.” At last year’s event, nearly every session had those three letters embedded in the topic.
For the most part I stuck to the CEO and Marketing tracks, aligning with my interests and role here at Private Advisor Group. John Hyland, one of our founding partners, participated on a panel session that spoke specifically to the Hybrid RIA model. Joined by David Canter, Fidelity; Gabe Garcia, Pershing Advisor Solutions; and Moderated by Michael Bryan, Triad; each of the three panelists discussed their challenges and obstacles from his unique viewpoint. One thing they all agreed upon was the fact that scale is critical. “Small RIAs don’t always recognize the risk they are taking in running their own RIA”, said Hyland. He gave an example, citing the fact that Private Advisor Group spends over $50,000 a year on cybersecurity alone. This charge is consistent regardless of whether you are a 100M RIA or a 15B RIA. A 100M RIA likely cannot sustain that cost over the long haul and those threats are only growing worse. Another key question that came up was FINRA’s recent inquiry around whether or not independent broker-dealers should continue to supervise Hybrid RIAs and what that would do to the IBD’s profitability and value chain.
Not Diverse Enough.
The panel session I participated on explored the topic of diversity in the workplace. Focused on how diversity can grow your business, I was joined by experts in the industry, Samantha O’Neil, Fidelity; Ryan Shanks, Finetooth Consulting; and moderated by Frieda Lewis, Broadridge Financial Solutions. We all agreed that statistically there is evidence proving a diversified team generates greater growth and efficiencies in an office and for a business; and yet when you look at the financial advisory business, diversity is pitiful. Samantha explained how Fidelity is inspiring its advisors to think in diverse ways as they hire for their practices, and are providing them with research and tools to do so. I spoke about our PAG internship program and how we are targeting younger, female business school students to intern in our advisors’ practices in hopes of getting them interested in the industry. Overall, the discussion was one that encouraged dialogue within the group about ways we can all play a role in shifting the demographics of our profession.
One of the greatest benefits of being at the FSI was the ample time to network with peers and industry veterans who come to the table with unique ideas and solutions for the industry. While most of the members of the audience are direct competitors, there was a sense of camaraderie and community. After all, we are sharing in the same challenges. A focus on risks in the business was prominent in discussions. Some areas of risk that were top of mind included the following: when to allow advisors to conduct “Rep as PM” business and the risks involved in doing so, reducing product shelves to manage risk, supervising remote locations, and what “reasonable compensation” means. While none of these issues were resolved, the dialogues around each were meaningful.
Overall, hearing and seeing so many thought leaders and distinguished executives in one place was inspiring and engaging. The support we all receive from our membership with the FSI sometimes goes unnoticed, but their intense focus on advocating for the independent advisor goes beyond Washington and provides solutions we can all use. I look forward to seeing what they introduce next.
To catch more information on the FSI and their upcoming conferences, you can visit financialservices.org.